The Premium Tax Credit Subsidy Caps By Percentage of Household Income for SLCSP 2023
Premium tax credits are tax credits that can be taken in advance as Advanced Premium Tax Credits or at tax time as Premium Tax credits (or you can do a mix). Premium tax credits cap premium spending for a family based on MAGI income compared to the federal poverty level and are based on the cost of the second-lowest silver plan (SLCSP) in a state’s Marketplace. To qualify you must purchase a marketplace plan.
The chart below shows the minimum and maximum percentage of the household income that a person will pay for that plan. The amount you’ll pay is based on your household income (compared to the federal poverty level) and is adjusted based on the price of the plan chosen.
NOTE: The 400% Federal Poverty Level (FPL) Subsidy Cliff was temporarily removed by the American Rescue Plan and extended through 2025 by the Inflation Reduction Act. Through 2025, if you make over 400% FPL tax credits gradually decrease as your taxable income raises.
NOTE: For 2021 – 2022, Section 9661 of the American Rescue Plan capped marketplace health insurance premiums. Not only did it provide lower caps for those who got subsidies through cost assistance, it also capped the premium that can be charged the benchmark plan at no more than 8.5% of household income. This means even without subsidies you couldn’t pay more than 8.5% of household income for a benchmark health plan. This amount is capped at 9.12% for 2023.
|Less Than 150% FPL||1.92% – 1.92%|
|At least 133% but less than 150%||1.92% – 1.92%|
|At least 150% but less than 200%||2.88% – 3.84%|
|At least 200% but less than 250%||3.84% – 6.05%|
|At least 250% but less than 300%||6.05% – 7.73%|
|At least 300% but not more than 400%||7.73% – 9.12%|
|At least 400% and higher||9.12% – 9.12%|
NOTE: To qualify for tax credits you must make between 100% – 400% of the poverty level (FPL). If your state expanded Medicaid you will be eligible for Medicaid instead of tax credits below 133% (or 138% adjusted) FPL. However, please note, those who aren’t eligible for Medicaid expansion who are on unemployment can get marketplace assistance under the American Rescue Act.
- Premium tax credit caps for 2023 are published in Rev. Proc. 2022-34.